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A query was raised regarding whether the contribution of assets can qualify for the special regime for mergers, demergers, and contributions under the Corporate Income Tax Act. The Directorate General for Taxes (DGT) ruled that, based on the facts, isolated assets are being transferred rather than an economic unit capable of operating independently.
This ruling limits the use of tax-neutral merger regimes to cases where a functional business unit is transferred, preventing the use of these rules for the mere transfer of individual assets.
The tax team reviews your specific situation.
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